This pilot study evaluates the effectiveness of law firms entering into joint ventures, an increasingly eyed business model particularly by American and British lawyers seeking to expand into promising financial markets. One country at the center of the joint venture experiment has been Singapore. With the strong encouragement of the Singaporean government (which has long embraced foreign investment), various elite law firms from the United States and Britain have been partnering with domestic Singaporean law firms for over the past decade. Because these foreign firms were traditionally barred from practicing Singaporean law on their own, the ‘joint law venture,’ or JLV as it came to be called, was initiated to provide the Americans and British with an opportunity to access the highly-desired, lucrative local market – through the use of their Singaporean joint venture colleagues. In return, the Singaporean firms were to benefit by gaining international legal contacts, learning ‘best practices’ from their foreign counterparts, and enhancing their reputations by being tied to prestigious law firm powerhouses.
Until now, no work has fully investigated whether these JLVs have actually fared as well as their advocates had hoped. Therefore, based on fieldwork conducted in Singapore, including in-depth interviews of the relevant parties, this project fills this gap – uncovering how due to economic misalignment, cultural misunderstandings, and a sheer breakdown of necessary human relationships, in more cases than not the JLV has been a failed business model. For these reasons, I argue that American and British law firms may wish to think seriously before pursuing the JLV route – not just in Singapore but perhaps even in other markets in which they are already present or are contemplating entering.
Thursday, November 5, 2009
Law Firms and Joint Ventures
A few months ago, we had posted about a paper by Professor Jayanth Krishnan on issues that revolve around the opening up of the Indian legal sector to foreign law firms. He has now released the results of another interesting piece of research titled The Joint Law Venture: A Pilot Study that examines the rate of success or failure of joint ventures between law firms by looking closely at the “joint law venture” model followed over the last decade in Singapore. Here is the abstract: